Problem 15-20 Determining sales and variable cost volume variances LO 15-2, 15-3, 15-4

Rooney Publications established the following standard price and costs for a hardcover picture book that the company produces.

Standard price and variable costs
Sales price	$	36.50
Materials cost		8.70
Labor cost		4.00
Overhead cost		5.60
Selling, general, and administrative costs		7.20
Planned fixed costs
Manufacturing overhead	$	129,000
Selling, general, and administrative		50,000

Rooney planned to make and sell 39,000 copies of the book.

Required:

a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 38,000 and 40,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 40,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)

F Master Budget 39,000 Volume Variances 40,000 Flexible Budgets Number of units 38,000 Variable manufacturing costs Fixed costs